Infosys Drops, Buyers Come In…Again

By Ben Levisohn

By dropping at the open, then rallying back, Infosys (INFY) is following a pattern set in yesterday’s trading.

Infosys’ shares opened at $41.80 today, down 1.5%, but has since cut the loss in half and has shed just 0.7% as of 10:24 am.

Yesterday, its stock traded as low as $41.61, down 1.84%, before rallying back to close at $42.44, off just 0.1%–and $41.61 was also the stock’s low on Dec. 18, when shares gained 1%.

It sure looks as if someone is trying to support the stock in the mid- to high-$41s. We’ll see if it holds in the coming days.

Nomura, meanwhile, had this to say about India’s IT companies, in general, and Infosys specifically, as it relates to the lessons learned from Accenture (ACN):

While outsourcing growth was healthy for Accenture, we see that to be more correlated to market share shifts and not to incremental spend increase, so do not see a positive rub-off on Indian IT…Accenture seeing more of the larger deals in the market and fewer of the smaller or mid-size deals could be a negative for Indian IT due to the relatively smaller participation of the latter in larger deals.

In a nutshell, we see the results to be negative for Indian IT where expectations are for acceleration next year and especially for Infosys and Wipro (WIP) where doubling of growth is being anticipated. We retain our cautious stance on the sector.

UPDATE: Infosys rallied all day long and finally when positive right before the close. It finished at $42.67, up 0.5% today–and 0.7% higher than Wednesday’s close, before all the selling began. The low of the day was $41.67, and the low has been within pennies of that level on five of the last seven days.

About Emerging Markets Daily

Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.